[OPE-L:3473] Re: Value of Money

Bruce Robert (broberts@usm.maine.edu)
Fri, 18 Oct 1996 09:16:47 -0700 (PDT)

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Alan, in #3402, responds to Fred while noting he is "still working my way
through Bruce's numbers." Fair enough--I am similarly not fully up to
speed on Alan's own numerical calculations in that post. But I do have two
preliminary comments.

First, Alan lists several different possible specifications for the
"monetary expression of labour," including one identified with the New
Solution ("the ratio between the net value added in money, and living
labour"). Then, next: "A fourth view--I think is implicitly your own and
Bruce's--is that the new monetary expression of value is given by the
ratio between the value and price of the gross product of society, that is,
the number of hours of society's total production of value which $1 will
buy. Thus a gross output of 72 hours is now expressed in a total sale
price of $90, so that now $1 represents 0.8 hours."

This number (0.8) is not one I would claim as my own. My number is the
same as what I suspect would be Duncan's number here, equal to $55/16 hours
(or its inverse, if we want to express the labor-time expression of money,
or the "value of money"). Indeed, the same result is reached whether one
calculates the monetary expression of labor as the ratio between net value
added in money ($55) and living labor (16 hours) or as the ratio between
the price of gross output ($90) and the value of gross output as I
calculate it in terms of current labor (which is 26.18182 hours).

[Alan attributes to Duncan a monetary expression of value of $26/16 hours.
Duncan hasn't commented on this, or if he has I've missed it, but I suspect
he would similarly disavow this ratio as expressing his own view.]

Second, I'm at a loss to understand the two rates of profit Alan offers in
his final accounting (a 'real' rate of .125 and a 'money' rate of .40625)
or the paired labor and money tables from which those rates are derived.
Since both calculations employ a "historic cost" approach to C and V, it's
not obvious to me how a total surplus value of 8 hours can be reconciled,
in a Marxian way, with a total money profit of $26. Alan attributes the
difference to inflation, but surely inflation is not a source of profit
independent of the surplus labor of workers. Yes, the scale on which
Alan's labor-time accounting takes place (total value of 72 hours) differs
from that on which money accounting occurs (total money price of $90), but
no matter how one corrects for this it would seem that profit is something
different from and larger than surplus value.

To put the question as plainly as possible: if profit really is simply the
monetary expression of the unpaid labor of workers, then shouldn't there be
some common scale in which both labor-time and price accounting can be done
such that total profit *equals* total surplus value? If there is one
consistent with Alan's argument, then I don't see it. I have my own ideas
about what is going on here (I can do the same sort of labor-time
accounting on Alan's money magnitudes that I offered earlier in response to
Andrew's), but I'd like to better comprehend Alan's thinking before jumping
to conclusions.

Bruce B. Roberts
Department of Economics
University of Southern Maine
Portland ME 04104-9300
(O) 207-780-5503
(H) 207-772-7047
fax 207-780-5507-------------------------------------------------